British Columbia’s election has brought unwelcome doubt for the business sector, given the prospect of an ascendant Green party influencing policy on pipelines, natural gas exports, hydroelectricity and other resource projects.
Christy Clark’s Liberal party took 43 seats, two ahead of the NDP, but just shy of the 44 seats needed to take a majority. Recounts and absentee ballots could still sway the final tally, such as with the Courtenay-Comox riding swinging to the NDP by a mere nine votes.
As it stands, the anti-pipeline, anti-fracking, anti-liquefied natural gas Greens hold the balance of power with their three seats, though party leader Andrew Weaver has said he is open to compromise and his top priority is to remove big money from politics.
The results only create more unpredictability for the Trans Mountain pipeline expansion, shale gas development and the Site C hydro dam that is already under construction, said Martin Pelletier, managing director at TriVest Wealth Council.
“The bottom line is, yesterday to today, there’s a lot more uncertainty around resource development and infrastructure build-out,” said Pelletier.
Throughout the campaign, the Liberals were regarded in some circles as the more investment-friendly party compared to their NDP rivals, whose leader cast doubt on the future of Site C and promised to use “every tool in the toolbox” to stop the Trans Mountain expansion.
While the political picture was muddied, the reaction from politicians and businesses with arguably the most at stake was clear: cautious.
Alberta NDP Premier Rachel Notley and Ian Anderson, president of Kinder Morgan Canada, issued brief statements congratulating all three parties, taking care not to make mention of a specific winner.
Notley supports the Kinder Morgan-led Trans Mountain development, a project that has faced blowback in some parts of B.C. Construction of the pipeline expansion is expected to begin in September.
In Edmonton, Alberta Energy Minister Marg McCuaig-Boyd said she doesn’t believe the Trans Mountain expansion is in jeopardy.
“We worked really hard to get to ‘Yes’ on those (pipeline) approvals and we’re still going to use our climate leadership plan as the guide to getting those pipelines,” said McCuaig-Boyd.
In Regina, however, Saskatchewan Premier Brad Wall expressed concern about the future of the pipeline.
“It’s concerning if indeed the results end up with British Columbia led by an NDP-led coalition because they’ve been very, very clear about Kinder Morgan, that they would do whatever they can to kill that pipeline,” Wall said.
Desjardins Capital Markets analysts said in a note that a minority government in B.C. could present significant challenges for the Canadian energy sector. They said Trans Mountain would be the most immediate casualty, with a knock-on effect on heavy oil producers. Oil and gas producers in the Montney Formation, which straddles both B.C. and Alberta, could also face greater uncertainty, they added.
“We view a minority government outcome as one of the most challenging potential outcomes for the Canadian energy sector,” they wrote.
RBC Capital Markets analyst Walter Spracklin said in a note that the results were negative for Westshore Terminals Investment Corp. (TSX:WTE), since Clark has proposed a levy on U.S. coal shipments through its Vancouver port in response to the softwood lumber dispute. Its stock closed down 3.6 per cent at $21.14 on the S&P/TSX composite index.
— With files from Dean Bennett in Edmonton and Jennifer Graham in Regina.